Sunteck Realty Limited (512179) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Sunteck Realty's Earnings Conference Call for Q2 and H1 FY '22. We have with us today Mr. Kamal Khetan, Chairman and Managing Director; Mr. Manoj Agarwal, Chief Financial Officer; Mr. Prashant Chaubey, SVP, Corporate Finance. Please note this call will be for 60 minutes of the duration for this conference call. [Operator Instructions] This conference is being recorded, and the transcript for the same may be put up on the website of the company. [Operator Instructions] Before I hand the conference over to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts and may be forward-looking statements, including those related to general business statements, plans and strategy of the company, its future financial condition and growth prospects. The forward-looking statements are based on the expectations and projections and may involve a number of risks and uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by such statements. I now hand the conference over to Mr. Khetan, Chairman and Managing Director of the company. Thank you, and over to you, sir.

Thank you. Thank you for joining Sunteck Realty Second Quarter FY 2022 Earnings Call. I'm excited to share with you our continued progress on the next phase of our development as a business. In our last call, we introduced the guideline principles of the new Sunteck, what we are calling Sunteck 3.0. Sunteck 3.0 is focused on 3 key priorities: an asset-light approach, a flywheel of high velocity growth and an exceptional and incentivized team. Market consolidation in favor of quality and well-funded real estate companies has been an ongoing trend, and Sunteck has been a key beneficiary of this trend, continuously expanding its business portfolio with attractive return opportunities. In fact, since the first wave of COVID-19 in 2020, Sunteck has been largest acquirer of highly value-accretive projects in MMR, a trend it sustains even today. We have added approximately 23 million square feet, across 5 projects in different micro markets of MMR, namely Vasai, Vasind, Borivali, Kalyan and Khopoli/Pen while targeting these acquisitions and achieving them. This has been possible only because of the excellent coordination of the various departments by the team Sunteck 3.0. These acquisitions are setting the stage for exponential growth of the company and underpins the first priority of our Sunteck 3.0 vision. On the back of these acquisitions, the company will witness significantly big new project launches in the second half FY 2022. Collection has witness steady growth along with high collection efficiencies. A key to our strong operational performance is being a dominant developer in each of the micro markets and housing segments we operate. Additionally, the focus on our core strength of sales and marketing will enable us to sustain the strong presale and collection trend going forward. With project across all the segments, mainly our uber luxury, mid-income and aspirational, allowing us to be present across the pricing spectrum, we are planning to grow our presales exponentially going forward. While we grow our presales, we are equally focused on our operating margins as well, which we want to take it from current 25% level to about 30%. This underpins our second priority under the Sunteck 3.0 vision. I'm very proud of the team we have built at Sunteck. Going forward, we intend to put a lot of our attention on our employee learning and development. The MMR housing sector has significant room for continued growth driven by improved affordability, lower home loan rates and young buyers, and the demand we are witnessing for the homes today, we expect, will continue for a very long time. I'm excited for what the future has in store for Sunteck and excited to continue to share it with all of you. Thank you. I will now hand over the call to our CFO, Mr. Manoj Agarwal, for his comments. Thereafter, I would be happy to answer your questions, if any. Over to Manoj. Over to you, [indiscernible].

Thank you, sir. Good evening, everyone, and thank you once again for joining us today. A very warm [indiscernible] to all of you. The financial and operational numbers have been uploaded under [ exchanges ]. I hope you all must have gone through our same. Now I would like to run you through the key financials of business performance numbers. Our presales grew by 54% on a quarter-on-quarter basis in Q2 FY '22 to INR 272 crores as against INR 176 crores in Q1 FY '22 and 36% year-on-year basis from INR 200 crores last year, same quarter. Collection grew by 20% quarter-on-quarter basis in Q2 FY '22 to INR 207 crores, as against INR 172 crores in Q1 FY '22 and 47% year-on-year basis from INR 141 crores in Q2 FY '21. For half year FY '22, presales grew by 48% year-on-year basis to INR 448 crores, as against INR 302 crores in H1 FY '21. Collection also grew by 83% year-on-year basis in H1 FY '22 to INR 379 crores, as against [ INR 106 crores ] in H1 FY '22. In terms of financial highlights, we reported a consolidated revenue of INR 136 crores in Q2 FY '22, as against INR 93 crores in Q1, which is an increase of 47% on Q-on-Q basis. On half year basis, revenue increased by 13% to INR 229 crores from INR 202 crores in corresponding period last year. Consolidated EBITDA for Q2 FY '22 is INR 36 crores, as against INR 21 crores in last quarter, which is an increase of 77% on Q-on-Q basis. EBITDA for half year 2022 stood at INR 57 crores as against INR 45 crores last year. That is also an increase of 27%. Consolidated PAT for Q2 FY '22 increased INR 15 crores as against INR 3 crores in last quarter. This is an increase of more than 400% on a quarter-on-quarter basis. And for half year basis, also increased by 122%. That is INR 18 crores from INR 8 crores in last year's corresponding period. As always, we continue to focus on our cash flow management and financial discipline, a must in this environment, and that continues to reflect in our low adjusted net debt equity result. That is excluding [indiscernible] equity, which has been reduced to [ 16x ] due to our strong operating cash flows. In the first half of FY '22 also, our operating cash flow was positive by INR 53 crores. The positive cash flow helped us to reduce finance cost as well as net debt significantly compared to the same period last year. We can now open the call for questions from the participants. Thank you very much.

[Operator Instructions] The first question is from the line of Kunal Lakhan from CLSA India.

Sir, just -- since your presentation is not yet out, so this is based on the limited information that is there. So just checking on the operational side. So we have done, say, about INR 250-odd -- or INR 450-odd crores of presales in the first half. How should we look at the full year and especially second half in terms of sales?

Yes. Kunal, correct. So first half, obviously, we didn't have much new launches. As you know, so in second half financial year, we are seeing at least 1 or 2 big launches, and that will drive the presales numbers exponentially. So we are looking at least 2 big launches out of the so many acquisitions, minimum, like -- at least, Vasind, one big launch and even a new phase of Naigaon over and above the 2 new launches. The third phase of Naigaon also we are almost ready for the launch of the third phase of the Naigaon as well.

Sure. And so what will come in Q3 or Q4?

So I can only say, Kunal, definitely in Q3 or Q4, we are trying to get it in Q3. But we know that approvals are not totally in the hands of the company. So leading apart from small last moment -- last mile approvals, I think we should be -- we are trying our best for Q3. If not Q3, Q4, for sure, we are confident.

Okay. And safety of Naigaon should not be an issue in terms of at approvals?

Yes, yes. Those approvals are -- obviously Naigaon, all the approvals are the routine approval. So then, we don't see any challenge.

Sure. And what about the Borivali launch. When do we plan to bring that to the market?

So it is early for me to comment on that because approval, anyhow -- we are given all the responsibility of the approval with the landlord partners although our team totally support them to get -- and help them to get the approvals. We are trying best, but we are not seeing the visibility at least in Q3. It can go to Q4 or otherwise in the next financial year.

Sure, sure. So based on...

[Operator Instructions] The next question is from the line of Adhidev Chattopadhyay from ICICI Securities.

Sir, just a couple of questions. One, first question is on the Vasind project. Initially, how has the response been? And what is our target for monetizing this project? And second question is since you've added so many projects now, 3 to 4 very large projects, are we like done for now? Do you want to consolidate for some time? Or do you still expect -- or rather, should we still see a lot of aggression in adding a lot more projects over the next 1 year?

So Adhidev, we are very clear that Sunteck 3.0 is all poised to grow exponentially. The way we have grown, if you see it, we have grown maximum during the Lehman Crisis time, and the company has a history of 50 years. So you can see last 2 to 3 years, we are growing -- we can continue to do our acquisitions. And we'll continue. You'll see this momentum of acquisition going forward as well. So we'll not slow down. We are not -- we're not finished with this acquisition. There is lot more units here from us going forward. As far as Vasind launch is concerned, obviously, we did because we knew that was a COVID time and in affordable segment. But since we got the approval so fast, we are -- if you can see, we are turnaround time from the acquisition of the plot to launching of the project. Most of the project, we'll see one of the fastest in the industry. So if you see the Vasind was turnaround in like 6 to 9 months. And with that, I think what response we got was very -- we were happy with that kind of response. And the moment we are very clear that more and more transport -- mode of transport of railway opens up, we'll see the momentum picking up in that segment -- at that micro market.

Okay. Sure. Sir, if I can just squeeze in the last point. Do we have the sales breakup for quarter broadly? I think in the presentation, I may have missed it while...

No, no, no. So Prashant, can...

So Adhidev, we have done [ 146 million ] in the high-income, uber and ultra-luxury segment of presales. In the mid-income segment, which is premium luxury, we have done [ 1,000 million ]. In the affordable exploration luxury segment, we have done [ 1,190 million ]. And in the commercial, we have done [ 380 million ]. So all in all, we have done [ 2,716 million ] of presales in quarter 2.

The next question is from the line of Varinder Bansal from Omkara.

I just wanted to understand a very basic question. When I see your Slide #3, and the way you have done a lot of acquisitions and if I see the stretch of the -- from even [ Pareel ] to Kalyan and all. You are present everywhere compared to, say, someone like Oberoi, which is only in 2, 3, 4 places. Our presales number are still at worth INR 270 crores, INR 280 crores on a quarterly basis. And with all the acquisitions, what we are doing, is there any target in your mind which you have that -- what you guys are targeting for the next 2, 3, 4 years upon completion of many of the projects you have undertaken? And you said that you are still open for a lot of acquisition going ahead.

So good question, Varinder. Thanks. We are very clear that we are poised to grow exponentially. So that is something very clear. And that's why we are strengthening our sales team as well simultaneously. We have mentioned in my last analyst call also that we have [indiscernible], and we have got some of the -- one of the best. I can say we are creating one of the best sales teams. We know that we are acquiring so many projects, so we have to continuously launch. So if you see in the past, we have -- Sunteck was dependent, in fact, more only 2 or 3 projects. So now we have 7 to 8 growth engines, which was like many firsts. It was like BKC, ODC or Naigaon. That's all. So now we can talk slowly that it will be BKC one growth engine. Then ODC will be the second growth engine. Naigaon will be the third growth engine. Vasai will be the fourth growth engine and so on so Kalyan. And all these are the big land sizes parcels. And these are like 40 acres, 50 acres when I'm talking about Vasai and Kalyan and all this location. And if you see these sizes, these are the like, for us, as a manufacturing factory for next 8 to 10 years. And with each factory, we continue to give you a cash positive outlook, such as operating outflow of like INR 100 crores to INR 150 crores per annum. And with the kind of acquisitions we have especially done right now, and we are almost among the -- one of the top developer in [indiscernible] in terms of size. From Borivali, we talk about from Bandra to Virar, we must be having the highest million square feet in terms of acquisitions. And once these approvals come, and which -- because all these acquisitions, most of it is done in last 18 months, once these approvals come, I think you will see the sales momentum also obviously going up.

No, I understood, sir. But whenever I see some announcement coming from you, there is a number of INR 4,000 crores, INR 5,000 crores, INR 6,000 crores, which is put on one project. I think recently, there was an announcement for Vasai project, right? And it said there's a potential of revenue for that kind of money or sales from that project. So when we're talking about 4, 5, 6 engines, which are there since last, say, 18 months you have acquired. So I'm just thinking that what kind of presales number, what you guys are targeting? Can we think about any -- is there any target what you have that going ahead, because we may be acquiring a lot of things, but we are still 1/4 of what, say Oberoi is doing in terms of quarterly presales number?

So what we are -- I can only say in the next 2 years, you will see these numbers going to ready next 2 years because all these projects will be operational. You will see these numbers going to exponential. It will not be surprise to see bigger numbers than any other of our -- some of our competitors, I would put it way.

Okay. I'll take the liberty to ask last question, sir...

[Operator Instructions] The next question is from the line of Biplab Debbarma from Antique Stockbroking.

My first question is on your -- the aspirational sales. So out of INR 119 crores or INR 110-odd crores that you have done this quarter, what would be the contribution of Vasind project, sir?

So Biplab, it will be, right now, for project-wise, if you want the numbers, I think Prashant will be able to give you separately offline. But if you want the segment-wise, we will be able to share with you the numbers immediately.

Segment-wise, I have that answered. And the second thing is on your overall sales velocity. Just trying to understand that your Vasai project has been in the initial 2, 3 -- 2 years. It has been doing something like INR 400 crores, INR 500 crores per year. And do you think that with the launch of this new phase, you'll be able to get that to that kind of momentum, rising in the first 2 quarters? It's a little bit muted compared to what we have seen in the initial period of the project cycle in Naigaon.

So I think there was no big launch. So we are very confident, Naigaon. We have been from last 3 years. If you see, we easily achieve our sales of close to INR 400 crores to INR 500 crores. And we are confidently year-on-year, we will only see a growth on that number. We don't see numbers going down from there or any of our locations, especially ODC, Naigaon and any of the new upcoming locations.

The next question is from the line of Pritesh Sheth from Motilal Oswal.

Firstly, on the launches, sir, you mentioned for the new project, we say probably in Q3, Q4 and Borivali sometime this year or initial part of next year. But what about Goregaon next phase and Naigaon? I don't know if you have mentioned, but on the cost of repetition, when would be the next launches will happen for Goregaon and Naigaon?

So Pritesh, Naigaon, if you -- I don't know, sorry, I think you missed out. I already replied that Naigaon will be looking to launch in the second half of financial -- FY '22. And coming to ODC. So ODC, we have some higher flows of Avenue 1 and higher flows of Avenue 2. And plus the higher flows of 4th Avenue. So before launching any new tower, so we are -- I'm talking the higher floors, which we have not launched before, in all this together, 3 to 5 and to 7 towers. So we will be like -- we will like to launch the 7 towers higher floor, which is equivalent to the inventory of more than 1 tower or 2 towers. So we will be launching that, and that is not difficult for us to launch, though that definitely we'll be launching in this current next half of -- second half of FY '22.

Got it. Sorry, I must have missed that. And secondly, on your latest acquisition that is [ plot ] development in Pen. So we are seeing increasing acceptance of these kinds of projects like [ plot ] development but, particularly, in Pune outskirt markets and Bangalore outskirt markets. So what was your view about this [ sort of ] development when you acquired this project? And what kind of customers that we are looking to target because I think for Mumbai outskirts, it is kind of a not very known thing that we are seeing? So your strategy on that.

So we all know that COVID has made a demand for second home very -- I mean, there is a good demand of second home. To take the benefit of that second home demand, obviously, we see this location is very attractive. This is something similar to what people will prefer to go to Karjat. And hence, we are targeting that segment. There is not too many good locations in Karjat. So this is Khopoli/Pen -- I believe this is a very known location, in fact, for people who have done research for buying a second home in and around Karjat or those locations. So this is also a new location, I feel. And we feel a good traction coming whenever we decide to launch that as well.

Okay. I get customers would be -- sorry, just to follow-up on...

Customers, we are looking at some mid-income group and some [indiscernible]. I feel that should be our target customer. We have different sizes of plots. So that -- and it doesn't take much time for these launches and all. So I think the approvals are only the key, and we are very confident of even that. Again, we put back responsibility on the landlords. And we are confident that, that also, we should get very quick.

The next question is from the line of Venkat Samala from Tata Asset Management.

My first question is we had initially guided for F '22 sales booking value of about INR 1,500-odd crores, right? Could you please confirm if we are on track to that?

Yes, Venkat. And yes, so we kept the target of close to INR 1,400 crores, INR 1,500 crores, and we are on track. And we are confident to achieve the -- near to that number. We are very confident.

Understood. Understood.

That doubt definitely should -- is coming from you, I can understand, because no big launches we could do immediately right now. So we are -- that would be happening in this current half of the financial year.

Right, right. I mean then the H2 run rate would be then about INR 1,000-odd crores, right, that you would need. That is where I was coming from.

We are looking at numbers which is close to that.

Understood. Understood. Sure. Thanks for confirming that. And secondly, with respect to collections, I understand YoY jump is huge. But then, when I compare with Q4 FY '21 numbers, it's still meaningfully lower. I mean Q4 FY '21, you've done around INR 320 crores. In Q2, it was INR 207 crores. So any aberration there that we should note?

No, no. Venkat, Prashant here. Venkat, there is no aberration. Generally, as the construction is progressing and as the projects are getting sold, receivables are coming to us. In fact, just to help you out, recently, we have received our occupation certificate for our revenue to Sunteck City. So that collections also, you will start seeing it coming in the third and the fourth quarter. So overall, there is no aberration. It's just, in the normal ordinary course of business, you will see collections moving up significantly going forward.

So should we expect Q3, Q4 collections to be closer to INR 300 crores and upwards of that?

So Venkat in the first half, we have done INR 380 crores of collections, which is a 84% jump over last year. So in the third and the fourth quarter, definitely, you will see collections moving upwards. It will -- last year, we have achieved INR 780 crores of collections. This year, we are definitely looking at INR 1,000 crores of collection.

Almost 30% to 35%, up 40% up than the last year started.

[Operator Instructions] The next question is from the line of Aditya Mehta from GK Capital.

So sir, you mentioned that you have set ODC revenue, too. So we will be delivering in current quarter? And what about the Naigaon?

So yes, Naigaon, we are looking Phase 1 to be delivered in this half of the financial year FY '22. And so we'll see -- obviously foresee of that project as well.

So what is the approximately underlined revenue in both of these projects?

So Prashant, do you have it?

So Aditya, we are now following -- showing everyone in Avenue 2, we are following percentage of completion method. So there, all the revenues are getting recognized as the construction is progressing whereas for Sunteck Westworld and Sunteck MaxxWorld -- in Sunteck Westworld, we are following project completion method of accounting, and in Sunteck MaxxWorld, we are following project completion method of accounting. So the revenue recognition for Sunteck Westworld will be closer to around INR 400 crores unrealized revenue. And for Sunteck MaxxWorld, the revenue will be recognized once the project is completed, which is close to around INR 700 crores.

Okay, sir. Okay. And sir, my second question, we have launched Sunteck Pinnacle in ODC. So is this a green signal for our commercial portfolio over there? Or just -- is it just a testing or a small launch, soft launch?

It's both. It's both because it gives us both comfort. So first, we sold it to DMart in the same development for INR 100 crores. And now, we wanted to test it as well, and we want to -- because this was a stand-alone building, we didn't want to retain it as a rental asset, and we wanted to see a demand. And we can say that I can share with you, the demand is really, really good. And we are really excited to look to see that when can we launch our big ODC commercial portfolio.

Okay. So now there is no doubt that we will not be -- we will be converting it to essential or somewhat. We will go ahead with the commercial only.

So commercial potential is always there. We can always convert -- see today, there is a huge demand of residential also. So if I see that the residential is giving me a faster and a better cash flow, it does not stop me from simultaneously starting one more phase of residential and simultaneously one more phase of commercial. So we have so much such a big land in there and the huge potential of our FSI I'm exploiting. So that is -- that will go for long, long time. That all will go for a long time.

The next question is from the line of Varinder Bansal from Omkara Capital.

Sir, I have 2 questions, okay. Again, from the presentation, you have done what in the last 3 years around 36 million acquisition. I think this could be almost what you, as a company, did in the last 10, 15 years or even more. I just want to understand these numbers are good. But on the organization side, are you adding more people? What is happening in terms of getting more and more people in terms of execution because execution will be something which is very important, right? Because now you're trying to do what you have done in the last 15, 20 years. And so is there any plan on that side?

Yes. So good questions, Varinder, once again. So [indiscernible], obviously, we started this company with the first one vision main project in with BKC, with no team, with zero team. And today, in 15 years, we are among the sizable company and some of the big players of the real estate in Mumbai MMR region. And I will not -- so now, there is a foundation that has been made very strong, I can say, in the last 10 years, 15 years. And now with that same foundation, we are very confident now growing -- we have grown exponentially where most of the developer we know that this industry has gone through the worst time in the last 15 years. In that 15 years, we have grown the company exponential. So now when it comes to execution, let me share with you, the execution -- what Sunteck is doing right now is in-house construction with very few developers, I think, or new developers, big-branded developers. No one is doing execution on their own. They are dependent on either the L&T or any other developer -- or any other contractor. In fact, Sunteck has in-house team and which gives a quality, which is as good as any big contractors. So looking at that, if you see -- if there is even a doubt with you or in that, Sunteck, how will we execute. We have that because we are operating in MMR market where the margins are very good and high margins. We can always outsource the execution -- construction company like L&T or any other, like, let's say, Capacit'e or any other contractor. Today -- and we have done that in the past also. When we were going exponentially that time also, we have done that. But we are -- right now, the team is so strong. We are confident at least whatever projects we have acquired 'til now. We can execute in house without taking any outsourcing the construction to the third-party contractor. So that is very clear. We are very confident. And that even if wherever we feel we can always outsource it.

Okay. I was honestly talking about the organizational structure, but I'll just do my second question before it might get cut. Also, there has been talks that there is some promoter equity which you want to sell in the market. Can you please clarify on that?

Yes, yes. So in fact, there is no promoter equity, which is getting sold in the market. That equity, which is a treasury stock of Sunteck in one of the -- 1 or 2 subsidiaries of Sunteck, which is Sunteck subsidy. The stock is -- so it is a treasury stock of Sunteck Realty. So whenever that -- and it is lying there for more than 10, 12 years. So it is only that it is not doing justice to the company by keeping that stock in the subsidiary. So our tax concern and like KPMG or PwC -- PwC, especially. So they have advised us, obviously, we should get rid of that stock, which is lying in the subsidiary. So that is the only reason. And whenever that stock gets sold or we decide to sell, we are not in a hurry. It has been lying there for last 10 years. So whenever that gets sold, the money will go to the company, Sunteck Realty. It will not come to the promoter. So that is one thing -- So it is in the subsidiary. So the stock got sold by the subsidiary, the money will book come to the subsidiary of the Sunteck.

No, how much is the percentage of equity?

So that is close to almost 4% of the company. That is close to 4% of the company, which is huge. So -- and Sunteck is not in a rush. We are in a -- I think we have one of the strongest balance sheet. So our debt equity ratio -- net debt equity ratio is like close to 0.16, and the cash flows are so strong. So we are not in a rush, but we can -- we know that we have to get rid of it at one point of time any time. At the right time, we'll see. We'll definitely advise investor that when we look at like -- which will only enhance the value of the company. And that money, if it comes in the Sunteck, that will only go for the further growth of the company, and that will only take the company again for the further next state of growth.

The next question is from the line of Parvez Akhtar Qazi from Edelweiss Securities.

So my first question is, what is the kind of residential inventory that we have in ODC and Naigaon projects? And second, what's the status of our under construction commercial projects [indiscernible]?

So Parvez, the exact numbers we gave, I think that -- once again, Prashant, think you can...

Parvez, you want the unsold inventory detail in ODC and Naigaon, right?

Yes, yes.

So in ODC, we have everyone, Avenue 1, Avenue 2 and Avenue 4. All 3 put together, we have close to around INR 1,000 crores to INR 1,100 crores of unsold inventory. And in Sunteck World Naigaon, we have close to around INR 400 crores of unsold inventory.

You said INR 200 crores?

INR 400 crores.

INR 400 crores. Okay, sure.

Parvez, Kamal Khetan here. I believe you are asking in the existing, ongoing or there is further FSI left, we are talking about that segment here.

I am asking for the existing products, which have already been launched. What is the unsold inventory that you have?

Okay. So that is fine. So I think that Prashant has already given. Yes, Parvez, you had one more question?

About the BKC commercial project.

Yes. So the BKC commercial project, Parvez, we are happy to note that all the approvals are in place for us. And the construction is in full swing. We intend to complete both these projects, Sunteck Icon and Sunteck BKC 51 in the coming 12 months. That is the time line for us. So all the approvals are in place.

The next question is from the line of [ Abhishek ] from YES Securities.

Just one question. Can we do a percentage of completion method and completed contracts, like I mean, simultaneously? Don't we need to reverse back the percentage completion method revenues?

So Abhishek, definitely going forward. So these were the old projects where before the Ind AS came, we were -- we were already following this percentage completion method. So -- and those projects are almost near completion. So that we have to continue, obviously. Otherwise, it could have been a problem. And I think my CFO, Manoj, would be able to explain you better, I think.

Manoj here. So in terms of the percentage completion method since we were following [indiscernible], so whatever the project, which is near to completion, we continue with that. And all the new projects and the projects which just launched, we adopted for the completion of the project method. This is the Ind AS guideline.

Okay, sir. Second question would be just a follow-up on someone asked. I mean where we think we should stop on adding new projects because as someone rightly said, we have added 36 million square feet. The only question is not about adding project but by execution also. So where do you see the project addition for next 1 or 2 years? Or what would be the number that would we say that it is sufficient for at least 5, 10 years kind of view or something like that?

So obviously, this answer, very frankly, we are very clear. We are not stopping here. And only the time will tell that we are able to -- so obviously, we are not a 30-year-old company or 40-year-old company. Your question, your doubts are very -- one of your thinking is very clear. I can understand you're not wrong. But when we were doing BKC also people were -- that was the first project of Sunteck, and these were the doubts that -- whether Sunteck will be able to complete the BKC project because it's such a high-end project and the first maiden project. Sale was a question when we -- all of a sudden, 23 acres in ODC Goregaon West, which is like a big project and which was company was that time only 4 years young or 5 years. I mean that was -- company started as good as real estate in 2006. And 2009 and '10, we straight away acquired 23 acres of land parcel in Goregaon. So there was a big question mark that whether Sunteck will be able to execute such big. So that time, obviously, we also were worried. So we got in L&T to do the execution. So we launched 3 towers. Out of those 3 towers, 2 towers, we gave it to [ MC ] for execution. And one tower, we started. Going -- we realized that we can -- going forward, we realized we slowly built the team. We saw the systems and process of the L&T, and we could -- we tried to better that. And we created an in-house team so that we can further execute all our projects in house, and we did that. And same thing when Naigaon we took -- so we realized that Naigaon -- before taking Naigaon, we have to build our execution team. So we built that execution team, and we didn't outsource in Naigaon, which is a big, big. So what we did in Naigaon, first phase was equivalent to what we did in last 12, 13 years across all the projects. Again, it was a big jump. It was like almost 100% increase in construction area. So that time also, Sunteck could ramp up the team and take it to almost double the construction quantity and -- which was again in house. And today, not only the first phase of Naigaon, second phase of Naigaon going, and various project sector and projects are going. And whatever I repeat that whatever projects we have taken right now, we are confident that all of those projects we can execute in house. And going forward, even if we have a doubt, so we will not compromise our growth due to feeling that we'll not be able to execute. We can always outsource to companies like L&T or Capacit'e. So that is not a problem actually [indiscernible] not a problem.

The next question is from the line of Adhidev Chattopadhyay from ICICI Securities.

Sir just again, a couple of questions. So first, sir, what is the [indiscernible] we are expecting in our BKC projects, considering that the market is pretty decent right now? And secondly, because of the FSI premium, the 50% concession, have we availed any benefits during this financial year? And could you quantify what are the savings we would have done, if any?

So I will ask -- Manoj would like to take this question [indiscernible].

Yes, Manoj here. So on asset side, there is total INR 250 crores benefit is available for us. And we're already availed of approximately, I can say, INR 70 crores, INR 75 crores. And the balance, we will be availing before December. That is the deadline, in December.

Okay. Fine. Sir, and the other on the BKC part, on the inventory monetizing?

So Adhidev, we can see definitely we are aggressively getting -- we are seeing there is a good traction, thanks for also Jio Drive, which has come -- the mall, which has come there. And we are seeing the convention center, again, coming up very soon. It was all -- due to the COVID impact, BKC was kind of -- because all the commercial locations were not fully operation. Now, we are in a lot of traction and God willing, we will see some good numbers coming up from the sales from the BKC as well.

The next question is from the line of Venkat Samala from Tata Asset Management.

Sir, you did mention that most of your projects currently that you're executing, you are doing in house. So if you could throw some more color on what is the team size and, also, on the quantum of the total asset value that you may be employing to develop those projects currently? And in the future, bearing in mind the expansion of your development pipeline, how do you think this could look like in the next 2 to 3 years? I mean, how much more investment would be needed to scale up your team?

So good question, Venkat. Again, I would say we have today a tough strength of close to 500 people, which is current staffing. And we know we need to increase this by yet trying to use most of the technology and IT to increase the numbers less and use technology for doing most of the job. So we are looking future, whatever we want to employ, minimalistic number of people, like, let's say, team of 500, we would like to increase to, let's say, 650 to 700 people and still manage this kind of -- because we like to outsource certain small, small things, which does not affect our margins much. And we are very clear in my opening remark also. I made it very clear. Our average operating margins right now were 25%. In spite of taking more project and going aggressively, we are now very clear. Our operating margins will be about 30% going forward. So -- and when you're talking to the current CapEx, like what we are putting every year-on-year is close to INR 500 crores per year right now. On construction, we are putting. Going forward, we are looking to put almost close to INR 1,000 crores.

Right, right. And what will be the total value of the assets that you'll use for construction?

That is very negligible. That is -- okay. And that so we can take it on rentals and outsourced. We don't try to own it ourselves because that's a pain.

So that would not be visible in the balance sheet then.

Yes, that's not much. That is negligible. But what we feel, we have to maintain the quality, and we have to keep it with us. We try to keep it ourselves. Otherwise, small, small equipment, we outsource it.

Understood. Understood. Understood. Right. And my last question would be...

Please go ahead.

Yes, yes. So now that you're pouring into this holiday on segment, are you seeing more opportunities to grow into that segment? And how much would this be your focus area? Was it likely -- was it just opportunistic that you got this? But is it also the case that there's a large opportunity here on as well, and therefore, maybe some of your focus would also be on this moving forward as well? How should we think about this?

So Venkat, to a large extent, you're right. It's not that you can grow a company on this. But if we are in real estate, we should not leave any opportunity which is coming, and we are seeing COVID has brought this new opportunity. And so why not exploit it? And we are using our satellite model in doing this. So we are totally keeping the company risk-free, in case of this, like the demand is all of a sudden, let's say, this demand -- we see that evaporate after 2 years or 3 years. Even in that case, company should not be bleeding or something. So we are very clear. It will be more as opportunistic, and we see a huge demand. So we will -- we may acquire or make 1 or 2 ongoing projects under this segment.

Ladies and gentlemen, that will be the last question for today. I will now hand the conference over to Mr. Chairman and Managing Director, Mr. Khetan for closing comments.

Thank you all for taking out the time from your busy schedule today. In case if any of your queries have been left unanswered, you can get in touch with me or my team. We look forward to your continued support. Thank you once again for joining us today, and please be safe.

Thank you very much. On behalf of Sunteck Realty, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.